November 10, 2021 8:00 AM
 — 
3
 min

Authentic Brands Group

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Authentic Brands Group is a New York-based holding company that operates clothing subsidiaries. Authentic Brands' portfolio consists of over 50 consumer brands. For example, Aéropostale, Nautica, Eddie Bauer, Jones New York, Forever 21, Juicy Couture, and Van Heusen. However, the company is not only concerned with clothing. Authentic Brands acquires the rights to sell products bearing the names of bygone celebrities such as Elvis Presley and Marilyn Monroe, as well as living legends such as Shaquille O'Neill and Doctor. J "Julius Erving. Despite the severe difficulties faced by shopping malls during the pandemic, many stores founded in the 1980s have been given a new lease of life thanks to Authentic Brands and its licensing activities.

Authentic Brands was established in 2010. In 2016, the company partnered with shopping center developers Brookfield Property Partners and Simon Property Group to save Aéropostale from bankruptcy. Shortly thereafter, Authentic Brands and Simon Property joined forces to form Simon Property Authentic Retail Concepts (SPARC Group). In 2020, Authentic Brands announced a partnership with Simon Property to save Lucky Brand Jeans from Chapter 11 litigation.

In June 2021, Authentic Brands and the SPARC Group teamed up to acquire the Eddie Bauer online store. In 2021, the company also announced the acquisition of assets held by Collective Licensing International such as Airwalk, Hind, Vision Street Wear and Above The Rim. These brands were previously owned by Payless Holdings, which has since ceased operations. In August 2021, Adidas sold its Reebok brand to the company. As of September 2020, the company's list of acquisitions was expected to bring in annual revenue to $ 15 billion, not counting all acquisitions made in 2021. From 2016 to 2020, Authentic Brands' revenue grew from $ 165 million to $ 489 million at a compound annual growth rate (CAGR) of 31%. From 2016 to 2020, net income grew at an average annual rate of 47%, increasing from $ 45 million to $ 211 million. For the 12 months ended March 31, 2021, Authentic Brands' sales amounted to $ 529 million.

Since 2010 Authentic Brands has raised funding through several rounds of direct investment. In total, the company managed to raise $ 1.1 billion. In the last private round in August 2019, the company raised $ 875 million from BlackRock's Long Term Private Capital, GIC and Jasper Ridge Partners. Authentic Brands did not disclose the date of the planned IPO, however, it is known that investors will be offered two classes of shares: ordinary shares of class A will be available to all investors, and class B shares will be available only to the CEO and his key employees. Class B shares will also have more votes than Class A shares. There is no official price range indicative. However, according to various media reports, Authentic Brands may be assessed at $ 10 billion. Renaissance Capital estimates that during the IPO the company will be able to raise up to $ 1.5 billion. It is known that the organizers of the deal will be BofA Securities, J.P. Morgan, Goldman Sachs, Jefferies, UBS Investment Bank, Wells Fargo Securities, Cowen, Guggenheim Securities, and KeyBanc Capital Markets.

Many analysts estimate that the apparel and footwear retail industry could grow from $ 1.9 trillion in 2019 to over $ 3 trillion by 2030. Favorable market conditions will support Authentic Brands' business as the company operates a variety of in-demand brands. In addition, most of the company's revenue comes from licensing fees, so the company can continue to grow by selling licensing agreements through e-commerce platforms even if malls and brick-and-mortar stores are out of service in the event of new outbreaks of coronavirus infection.


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